Sussex County Man Sentenced to Three Years in Prison for $2 Million COVID-19 Fraud

November 15, 2023

From the U.S. Attorney’s Office, District of New Jersey

NEWARK N.J. – A Sussex County, New Jersey, man was sentenced to 36 months in prison for defrauding several financial institutions and illegally obtaining more than $2 million in COVID-19 funding meant to help small businesses impacted by the pandemic, U.S. Attorney Philip R. Sellinger announced today.

John Jhong, 54, of Sparta, New Jersey, previously pleaded guilty before U.S. District Judge Susan D. Wigenton to an information charging him with one count each of bank fraud, money laundering, and misuse of a Social Security number. Judge Wigenton imposed the sentence on Nov. 15, 2023, in Newark federal court.

“The defendant took money from government programs that were established to provide financial assistance to Americans who were struggling to cope with the COVID-19 pandemic. The sentence handed down today is his reward for attempting to turn these vital relief programs into his personal ATM. We will continue to work with our law enforcement partners to find and punish those who have tried to take advantage of the federal government.” –U.S. Attorney Philip R. Sellinger

“The theft of taxpayer funds is inexcusable,” Tammy Tomlins, Special Agent in Charge of IRS – Criminal Investigation, Newark Field Office, said. “IRS Criminal investigation will hold accountable anyone who steals from government programs intended to help those in need. We remain committed to working with our law enforcement partners to ensure fraudsters are brought to justice. Today’s sentence punishes the defendant’s criminal conduct and should serve as a significant deterrent to others who would selfishly steal from their fellow citizens to unlawfully enrich themselves.”

“Ensuring the Postal Service is not being used to perpetuate frauds against the U.S. Government, or its citizens, is one of our top priorities,” Christoper A. Nielsen, Inspector in Charge, Philadelphia Division, said. “The Postal Inspection Service will continue to investigate CAREs Act fraud schemes through our participation in the NJ COVID-19 Fraud Enforcement Strike Force.”

“Today the defendant in this case was brought to justice for fraudulently obtaining more than $2 million in COVID-19 relief funding that was designed to assist struggling businesses during the pandemic,” Special Agent in Charge Patricia Tarasca of the Federal Deposit Insurance Corporation Office of Inspector General (FDIC OIG) saod. “The FDIC OIG will continue to work with our law enforcement partners to investigate and hold accountable those who took advantage of pandemic relief programs and threatened to undermine the integrity of our Nation’s financial institutions.”

“As the nation was struggling with the damaging effects of the pandemic, Mr. Jhong callously attempted to deceive lenders and fraudulently secure Paycheck Protection Program loans by knowingly misusing several Social Security numbers,” Gail S. Ennis, Inspector General for the Social Security Administration, said. “I thank the investigating agencies and the U.S. Attorney’s Office for their efforts in holding Mr. Jhong accountable for these crimes.”

According to documents filed in this case and statements made in court:

Jhong submitted numerous fraudulent loan applications in which he sought over $15 million in federal pandemic aid and illegally obtained $2 million of that money. Jhong used false and fraudulent tax returns, government forms, and other people’s names and documents, including Social Security numbers of individuals who were deceased for over a decade. He spent his ill-gotten gains on personal expenses.

In addition to his prison sentence, Judge Wigenton ordered three years of supervised release and restitution of $2.13 million.

U.S. Attorney Sellinger credited special agents of IRS – Criminal Investigation, under the direction of Special Agent in Charge Tammy Tomlins; special agents of U.S. Postal Inspection Service, under the direction of Inspector in Charge Nielsen, Philadelphia Division; special agents of the Social Security Administration, Office of the Inspector General, under the direction of Special Agent in Charge Sharon MacDermott; special agents of the Federal Deposit Insurance Corporation – Office of the Inspector General, under the direction of Special Agent in Charge Patricia Tarasca in New York; and special agents of the U.S. Secret Service, under the direction of Special Agent in Charge Jose Riera. He also thanked the Sparta Township Police for their assistance.

The government is represented by Assistant U.S. Attorney Fatime Meka Cano of the U.S. Attorney’s Economic Crimes Unit in Newark and Trial Attorney Chad M. Davis of the U.S. Department of Justice’s Criminal Division, Money Laundering and Asset Recovery Section.

The District of New Jersey COVID-19 Fraud Enforcement Strike Force is one of five strike forces established throughout the United States by the U.S. Department of Justice to investigate and prosecute COVID-19 fraud. The strike forces focus on large-scale, multi-state pandemic relief fraud perpetrated by criminal organizations and transnational actors. The strike forces are interagency law enforcement efforts, using prosecutor-led and data analyst-driven teams designed to identify and bring to justice those who stole pandemic relief funds.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.